India's Economy To Grow At 6.4% Amid Global Uncertainties: Sitharaman
The effective capital expenditure in Budget 2025 is projected at Rs 15.48 lakh crore, with the fiscal deficit expected at 4.4%.
Union Finance Minister Nirmala Sitharaman emphasised employment-led development and boosting manufacturing in India during the Budget debate in the Lok Sabha on Tuesday.
The effective capital expenditure in the budget is projected at Rs 15.48 lakh crore, with the fiscal deficit expected at 4.4%. India has transitioned from being part of the "fragile five" to one of the top five global economies, according to Sitharaman. "This budget has come at a time of immense uncertainties, and the change in global macroeconomic environment makes it challenging," she said.
Sitharaman pointed out that global conflicts, including the Russia-Ukraine war and Middle East tensions, along with stagnation in the global GDP and inflation in emerging markets, have complicated budget-making.
Advance estimates project India's economic growth at 6.4%, while food inflation appears to have moderated. The finance minister highlighted that 99% of government borrowings are allocated for capital expenditure, which stands at 4.3% of the GDP.
"World's scenario in last 10 years turned 180 degrees; making Budget is more challenging than ever before," Sitharaman said. She added that the government using 99% borrowings for capital expenditure, which is 4.3% of the GDP.
On the rupee depreciation, Sitharaman highlighted that major Asian and G-10 currencies have depreciated during this period. "There are domestic and global factors that affect the value of the rupee," she said.
The expenditure profile statement shows that money is lying in the states' accounts and has not been utilised, the finance minister added.
"The total transfers to states in FY 2025-26 will be Rs 25.01 lakh crore, an increase of Rs 2.1 lakh crore from the previous year," Sitharaman said on sectoral allocations and state transfers. "Agriculture sector received Rs 1.71 lakh crore and rural development has received Rs 2.67 lakh crore."
Sitharaman cited the Annual Periodic Labour Force Survey, which shows, labour force participation ratio has increased from 49.8% in 2017-18 to 60% in fiscal 2023-24. Worker-population ratio rose from 46.8% in 2017-18 to 58% in fiscal 2023-24.
Sitharaman said unemployment rate declined to 3.2% in 2023-24. "The government is focusing on bringing prosperity to the villages along with making agriculture, MSME, investment and export the growth engines," she said.
